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Under the doctrine of respondeat superior, an employer is responsible for the negligent acts of its employee if the employee's tortious acts were done within the scope of his employment duties. 

 

Under the doctrine of respondeat superior, an employer is responsible for the negligent acts of its employee if the employee's tortious acts were done within the scope of his employment duties. Helm v. Wismar, 820 S.W.2d 495, 497 (Mo. banc 1991).

 

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***Case on point

***Theory: vicarious liability

 

Premium Fin. Specialists, Inc. v. Hullin, 90 S.W.3d 110 

The finance company discovered that an officer for the customer company submitted a false loan application to it on behalf of a nonexistent entity. The officer fabricated the scheme to obtain the money for his own use. The customer company asserted that it was not liable for the officer's acts because he acted wholly out of personal motive and with the purpose of defrauding both the finance company and the customer company. The appellate court concluded the customer company mistakenly relied solely on principles of respondeat superior. The customer company had granted the officer authority to act on its behalf. The customer company authorized the officer to prepare applications to be submitted to the finance company and the customer company submitted a signature card with the officer's signature indicating that he was authorized to sign on the customer company's behalf. In helping clients to arrange for loans from the finance company, the officer's acts were subject to the customer company's control. The appellate court held that the customer company was vicariously liable for the officer's actions because the finance company established the elements of misrepresentation.

 

A principal is liable vicariously for his agent's acts if the principal manifests his consent to, or knowingly permits, the agent's exercise of authority, and if the third party believes, with a reasonable, good faith basis for doing so, that the agent has authority and relies on the agent's apparently having authority to act.

 

When a principal cloaks his agent with apparent authority, the principal can be vicariously liable to wronged third parties even when the agent acts wholly out of personal motive or with the purpose of defrauding his principal and even when the principal is innocent and deprived of any benefit. 

 

The principles of apparent authority are broader than the principles of respondeat superior. 

 

A corporation is liable for a fraud perpetrated on a third person by its agent within the apparent scope of his authority or the course of his employment even where the wrongful acts are ultra vires or in fraud of the corporation itself, and despite the fact that the corporation did not authorize, concur in, or know of, the fraud. 

 

A principal may be responsible for his or her agent's fraud or misrepresentation even though he or she may personally received no benefits therefrom, and it is of no consequence that the agent acts entirely for his or her own purposes and commits a fraud solely for his or her own benefit, if it is within the actual or apparent scope of his employment. Moreover, a corporation is not relieved from liability for the fraudulent acts of its officer within the apparent scope of his or her authority by the fact that the officer, in committing the fraud, is acting for his or her own benefit and the fact that the corporation does not profit by it. 

 

The elements of fraudulent misrepresentation are: (1) a false, material representation; (2) the speaker's knowledge of its falsity or his ignorance of its truth; (3) the speaker's intent that it should be acted upon by the hearer in the manner reasonably contemplated; (4) the hearer's ignorance of the falsity of the statement; (5) the hearer's reliance on its truth, and the right to rely thereon; and (6) proximate injury.